Opinion
No. 40019.
January 13, 1931.
BANKS AND BANKING: Stockholders — Superadded Double Liability — 1 Improper Plaintiff. An insolvent bank may not maintain an action against its stockholders to enforce and collect the superadded double liability imposed by Sec. 9251, Code, 1927.
BANKS AND BANKING: Stockholders — Assessment — Non-power of
Superintendent.
Appeal from Story District Court. — T.G. GARFIELD, Judge.
Action by the plaintiff-bank against its own stockholders, to enforce and collect an assessment against the stockholders, pursuant to the provisions of Sections 9248 to 9252, Code, 1927. The district court sustained a demurrer to the petition. The plaintiff elected to stand, and submitted to judgment dismissing its petition. It has appealed from the judgment. — Affirmed.
E.S. Tesdell and Addison Smedal, for appellant.
Lee, Steinberg Walsh, for appellees.
The petition averred that the plaintiff-bank had become insolvent prior to April 21, 1927; that, on that date, under the supervision of the state banking department, it transferred all its assets to the Farmers Savings Bank of Slater; that the said Farmers Savings Bank of Slater assumed the 1. BANKS AND payment of all the plaintiff's deposits; that, BANKING: in order to induce such assumption by the stockhold- Farmers Savings Bank, certain directors of the ers: super- plaintiff-bank gave to the said Farmers Savings added Bank their obligation to hold it harmless; that double said directors thereby became creditors of the liability: insolvent bank; that said insolvent bank has not improper sufficient assets to pay its creditors. Hence plaintiff- this proceeding to enforce an assessment. The right to bring the action was predicated upon a formal order issued by the superintendent of banking, which order was set forth as an exhibit to the petition, as follows (omitting formalities):
"Whereas, in the sale of the Home Savings Bank of Slater to the Farmers Savings Bank of Slater, on the 21st day of April, 1926, there was executed a bills payable note of the Home Savings Bank of Slater to cover any deficiency between the assets of the said Home Savings Bank and the deposit liability assumed by the Farmers Savings Bank,
"And, whereas, in a recent examination of the Farmers Savings Bank of Slater, the examiner found that the assets of the Home Savings Bank of Slater have been exhausted and that they were insufficient to meet the liabilities of the bank,
"Now, therefore, I, L.A. Andrew, superintendent of banking for the state of Iowa, do hereby order and direct that an assessment be made upon the several stockholders of said bank, namely, Home Savings Bank of Slater, Iowa, amounting to one hundred per cent (100%) of the capital stock, being one hundred dollars ($100.00) per share of the stock held by each stockholder, for the purpose of paying the obligations of the said Home Savings Bank to its creditors, as provided by Sections 9251 and 9252 of the Code."
It will be noted from the foregoing that the order above set forth purports to declare an assessment pursuant to Sections 9251 and 9252. These sections relate to the superadded liability of stockholders for the debts of an insolvent bank. The bank itself has no right to maintain such an action. Such action accrues to the creditors, and not to the bank. Plaintiff recognizes this state of the law and the incongruity of its petition. It contends, however, that the reference to those sections in the order was a manifest error, and that the same should be disregarded as surplusage.
It contends that the real purpose of the superintendent of banking was to order an assessment under the provisions of Section 9248, which provides for an assessment to restore impaired capital. This, however, is a mere inference or deduction, and is not made apparent in the 2. BANKS AND record. It is argued that, inasmuch as the state BANKING: superintendent of banking had no right to order stockhold- an assessment under Sections 9251 and 9252, this ers: assess- is a sufficient reason for saying that he must ment: non- have intended, rather, to order an assessment power of under Section 9248. But he had no better right superinten- to order an assessment under Section 9248 than dent. he did to order one under Sections 9251 and 9252. Section 9248 has no application to insolvent banks. It applies only to solvent banks whose capital has been impaired. It does not contemplate the restoration of the capital of an insolvent bank. When a bank becomes insolvent, it becomes the duty of the superintendent of banking to proceed against it, as such. No power is conferred upon the superintendent under Section 9248 to impose an assessment upon the stockholders of an insolvent bank. Moreover, the order above set forth purports to be for the benefit of the creditors of the plaintiff-bank. Such is the function of Section 9251. It is not the function of Section 9248.
Plaintiff's petition was properly dismissed, and the order of the district court is — Affirmed.
De GRAFF, ALBERT, MORLING, KINDIG, and WAGNER, JJ., concur.